June 9, 2011
The European Central Bank said on Thursday it opposed forcing private creditors to take part in debt relief for Greece, pushing back against Germany, which has demanded a bond swap to lengthen Greek debt maturities.
ECB President Jean-Claude Trichet signaled the hard line at the bank's monthly news conference, as new figures from Athens showed the Greek economy shrank by 5.5 percent in the first quarter of the year, a far sharper rate than expected.
The data cast fresh doubt on Greece's ability to meet targets for cutting its budget deficit, part of a 110 billion euro bailout agreed with the European Union and the International Monetary Fund in May last year.
The EU is now considering another aid package for Athens, and euro zone sources told Reuters on Thursday the new deal would total about 120 billion euros, with the EU and IMF providing up to half of that sum and the rest coming from Greek privatization revenues and private creditors.
How to involve the private sector is hotly contested within the single currency bloc.
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